Indian Hills Holdings, LLC v. Frye et al, No. 3:2020cv00461 - Document 8 (S.D. Cal. 2021)
Court Description: ORDER Granting 7 Motion to Serve the Summons and Complaint as to Construction & Design Professionals, Corp. on the Secretary of State. Plaintiff may affect service or process on Defendant CDP by serving two copies of the summons and complaint on the Arizona Corporation Commission. All doe defendants are dismissed from this case without prejudice. Signed by Judge Roger T. Benitez on 3/25/2021. (mme)
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Indian Hills Holdings, LLC v. Frye et al Doc. 8 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 18 ) ) ) Plaintiff, ) v. ) ) CHRISTOPHER FRYE, an individual; ) CONSTRUCTION & DESIGN ) PROFESSIONALS, CORP., an Arizona ) domestic for profit (business) corporation; ) and DOES 1-10, ) Defendant. ) 19 I. 11 12 13 14 15 16 17 INDIAN HILLS HOLDINGS, LLC, a California limited liability company, Case No.: 3:20-cv-00461-BEN-AHG ORDER GRANTING MOTION TO SERVE THE SUMMONS AND COMPLAINT AS TO CONSTRUCTION & DESIGN PROFESSIONALS, CORP. ON THE SECRETARY OF STATE [ECF No. 7] INTRODUCTION 20 Plaintiff INDIAN HILLS HOLDINGS, LLC, a California limited liability company 21 (“Plaintiff”) alleges that Defendant CHRISTOPHER FRYE, an individual (“Mr. Frye”), 22 and CONSTRUCTION & DESIGN PROFESSIONALS CORP., an Arizona corporation 23 (“CDP”) (collectively, “Defendants”) took Plaintiff’s money in exchange for promising to 24 provide Plaintiff with goods. See generally Complaint, ECF No. 1 (“Compl.”). However, 25 even though Plaintiff sent Defendants the money, Plaintiff never received the goods, and 26 Defendants have not refunded Plaintiff’s money. Id. 27 Before the Court is Plaintiff’s Motion for an Order Authorizing Service of the 28 Summons and Complaint on Defendant CDP by service upon the Secretary of State (the -13:20-cv-00461-BEN-AHG Dockets.Justia.com 1 “Motion”). ECF No. 7. 2 The Motion was submitted on the papers without oral argument pursuant to Civil 3 Local Rule 7.1(d)(1) and Rule 78(b) of the Federal Rules of Civil Procedure. After 4 considering the papers submitted, supporting documentation, and applicable law, the Court 5 GRANTS Plaintiff’s Motion. 6 II. BACKGROUND 7 A. Statement of Facts 8 Plaintiff alleges that in November 2019, it entered into contracts to purchase 9 Cultivation “Adult” Extreme Cubes for $182,000.00. Compl. at 3:12-4:9. Plaintiff alleges 10 it “provided the $182,000.00 to Defendants as full payment in accordance with the terms 11 of the Agreement for the purchase of the Items.” Id. at 1:11-13. However, Plaintiff alleges 12 that it never received the goods, and “Defendants have failed to refund or reimburse 13 Plaintiff for the full amount of the Agreement tendered by Plaintiff.” Id. at 6:24-25. 14 Plaintiff also alleges that (1) Defendant Christopher Frye “is an individual and 15 citizen of the [S]tate of Arizona,” (2) Defendant CDP is a domestic for-profit corporation, 16 with its principal place of business at 3271 North Axtell Road, Florence, Arizona 85132, 17 and (3) and Mr. Frye is the agent for service of process for CDP registered with the Arizona 18 Secretary of State with an address of 3271 North Axtell Road, Florence, Arizona 85132 19 (the “Registered Agent Address”). Compl., ECF No. 1:20-26. 20 B. Procedural History 21 On March 11, 2020, Plaintiff filed a complaint against Defendants alleging claims 22 for relief for (1) breach of written contract; (2) fraud; and (3) unjust enrichment. Compl. 23 That same day, the Clerk of the Court issued the summons in this case. ECF No. 2. 24 On May 3, 2020, Plaintiff filed a Proof of Service, pursuant to which Rose Drogitis 25 declared that on March 30, 2020 at 3:50 p.m., by delivering a “copy thereof” to Mr. Frye 26 at the Registered Agent Address, she served (1) CDP and (2) Christopher Frye as an 27 individual via certified mail with return receipt requested. ECF No. 3, 4. In other words, 28 Plaintiff attempted to serve both Defendants by certified mail, and by mailing only one, -23:20-cv-00461-BEN-AHG 1 rather than two, copies of the complaint. 2 On May 30, 2020, Plaintiff filed a Motion for Service by Publication, accompanied 3 by the Declaration of Dan Heilbrun in support thereof, seeking to serve both the individual 4 and corporate defendants by publication. ECF No. 5. On November 18, 2020, this Court 5 denied that Motion without prejudice because, inter alia, (1) Plaintiff’s attempts to serve 6 Defendants by mail did not effectuate service of process, (2) Plaintiff had failed to show 7 reasonable diligence in attempting to serve the individual Defendant, Mr. Frye, and (3) 8 service on a foreign corporation may not be accomplished by publication. See Indian Hills 9 Holdings, LLC v. Frye, 337 F.R.D. 293, 299 (S.D. Cal. 2020). The Court gave Plaintiff a 10 final ninety (90) day extension to serve Defendants. On February 17, 2021, Plaintiff filed the instant Motion for an Order to Serve 11 12 Defendant CDP by Service Upon the Secretary of State. Motion, ECF No. 7 (“Mot.”). 13 III. LEGAL STANDARD 14 A plaintiff may effectuate service of process of the summons and complaint in any 15 judicial district of the United States pursuant to either (1) the law of the state in which the 16 district court is located or (2) the methods approved by Rule 4 of the Federal Rules of Civil 17 Procedure (“Rule 4”). FED. R. CIV. P. 4(e). Under Rule 4, service may be made by 18 delivering a copy of the summons and complaint to (a) the individual personally, (b) the 19 person’s dwelling “or usual place of abode[, leaving them] with someone of suitable age 20 and discretion who resides there,” or (c) “an agent authorized by appointment or by law to 21 receive service of process.” Id. 22 Where service is made under Rule 4(e), courts “are governed by the decisions of 23 the Supreme Court of California as to the scope and meaning of the California statute.” 24 Mech. Contractors Ass’n of Am., Inc. v. Mech. Contractors Ass’n of N. Cal., Inc., 342 25 F.2d 393, 398-400 (9th Cir. 1965) (upholding service under California law upon 26 California’s Secretary of State on a New York corporation that had not been qualified to 27 business in California but had, nonetheless, been doing business there). California law 28 allows courts to look to both California law governing service of process as well as the -33:20-cv-00461-BEN-AHG 1 law of the place where the defendant is located. CAL. CIV. PROC. CODE § 413.10(b). 2 California law provides for various means of service, including but not limited to (1) 3 personal delivery, CAL. CIV. PROC. CODE § 415.10; (2) leaving the summons and complaint 4 with a person found at the office, dwelling, or house, id. at § 415.20; (3) service by Notice 5 and Acknowledgement of Receipt, id. at § 415.30; (4) service by mail on persons outside 6 the state, provided the return receipt is returned, id. at § 415.40; and (5) service by 7 publication, id. at § 415.50. Section 416.10 of the Code of Civil Procedure (“Section 8 416.10”) lists “Corporations Generally” as a “person upon whom summons may be 9 served.” That section provides that “[a] summons may be served on a corporation by 10 delivering a copy of the summons and the complaint” to either (1) a designated agent, (2) 11 an officer, manger, or other “person authorized by the corporation to receive service of 12 process,” (3) a cashier or assistant cashier if the corporation is a bank, or (4) the Secretary 13 of State if authorized by, inter alia, Corporations Code section 2111 (“Section 2111”). 14 CAL. CIV. PROC. CODE § 416.10; see also ARIZ. R. CIV. P. 4.1(d) (providing that under the 15 Arizona Rules of Civil Procedure, an individual may be served by delivering a copy of the 16 summons and complaint to the (1) individual personally, (2) individual’s dwelling or abode 17 with someone of suitable age who resides there, or (3) agent authorized by appointment or 18 law to receive service of process for the individual). Section 2111, which governs service 19 on foreign corporations,1 in turn, provides that service on the California Secretary of State 20 may be made where none of the officers or agents of the corporation may be found after a 21 reasonably diligent search or “if no agent has been designated.” CAL. CORP. CODE § 2111. 22 IV. DISCUSSION 23 Plaintiff argues that even though Mr. Frye, CDP’s “designated agent for service of 24 process (and sole shareholder), and its counsel have actual knowledge of the instant 25 lawsuit, they have successfully evaded service of process to date namely by (1) failing to 26 27 28 The Corporations Code defines a “foreign corporation” as “any corporation other than a domestic corporation.” CAL. CORP. CODE § 171. As such, Defendant CDP, as an Arizona corporation, qualifies as a foreign corporation. 1 -43:20-cv-00461-BEN-AHG 1 provide a valid address for the designated agent for service of process to either the 2 California Secretary of State or their home state’s Secretary of State, (2) refusing to pick 3 up mail sent to them at their alleged business address, and (3) otherwise providing vacant 4 lots as addresses associated with their business.” Mot. at 2:5-12. 5 “Section 416.10 [of California’s Code of Civil Procedure] governs service of process 6 upon corporations generally.” Gibble v. Car–Lene Research, Inc., 67 Cal. App. 4th 295, 7 303 (1998); see also Rose v. Seamless Fin. Corp. Inc., No. 11-cv-00240-AJB-KSC, 2013 8 WL 1285515, at *6 (S.D. Cal. Mar. 26, 2013) (citing Gibble). California’s Code of Civil 9 Procedure (the “CCP”) along with its Corporations Code jointly vest the courts with the 10 authority to issue an order that service may be made upon the Secretary of State. CAL. 11 CODE CIV. PROC. § 416.10. Courts may order service on the Secretary of State where (1) 12 a plaintiff proves he or she is unable to personally serve a corporate defendant because the 13 designated agent for service of process cannot with reasonable diligence be found at the 14 address designated for personally delivering the process and (2) it is shown by affidavit or 15 declaration that process cannot be served with reasonable diligence in any other way. CAL. 16 CODE CIV. PROC. § 416.10; CAL. CORP. CODE §§ 1702 and 2111. Further, when a plaintiff 17 presents a district court with evidence of a defendant intentionally evading service of 18 process, the Ninth Circuit has affirmed a district court’s ability to exercise “its discretionary 19 powers to craft alternate means of service” in order “to ensure the smooth functioning of 20 our courts of law.” Rio Properties, Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1016 (9th Cir. 21 2002); see also id. at 1017 (affirming service on the defendant’s attorney where (1) the 22 defendant’s attorney “had been specifically consulted by [defendant] regarding this 23 lawsuit,” (2) “knew of [the defendant]’s legal positions,” and (3) “was in contact with [the 24 defendant] in Costa Rica”); Guifu Li v. A Perfect Day Franchise, Inc, 281 F.R.D. 373, 388 25 (N.D. Cal. 2012). 26 As outlined below, Plaintiff’s Motion is GRANTED. Even though Plaintiff still 27 28 -53:20-cv-00461-BEN-AHG 1 failed to request a hearing date for its Motion,2 as required by the Local Rules and noted in 2 the Court’s previous order, Plaintiff has shown an inability to serve CDP at its Registered 3 Agent Address. Plaintiff has also shown an inability to serve CDP in any other way. 4 Further, failure to obtain a certificate of qualification 3 to do business in California or update 5 the listing for an agent for service of process qualifies as a scenario warranting service on 6 the California Secretary of State. As such, because Defendant CDP failed to designate an 7 agent for service of process in California, service on the Secretary of State is appropriate. 8 See Mot. at 3:7-11. A. 9 10 11 12 13 The Registered Agent Cannot with Reasonable Diligence be Personally Served at the Designated Address The primary and preferred method for service of process on a corporation is by delivering a copy of the summons and complaint to the person designated as the agent for service of process. CAL. CIV. PROC. CODE. § 416.10. In this case, Plaintiff made at least 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 Local Rule 7.1 requires that a hearing date must be requested from the clerk of the judge to whom a case is designed “for any matters on which a ruling is required.” S.D. Cal. Civ. R. 7.1(b); see also id. at subdivision (f) (requiring a motion to include the “hearing date and time”). Here, Plaintiff never requested a hearing date, and as such, the Motion should have been rejected. S.D. Cal. Civ. R. 7.1(e)(7) (providing that “[t]he clerk’s office is directed not to file untimely motions and responses . . . without the consent of the judicial officer assigned to the case”). However, the Court exercises its discretion to accept the Motion but cautions Plaintiff that it must comply with the Local Rules going forward. Any further failure to comply with the Local Rules may result in sanctions the Court deems appropriate. 3 Any foreign corporation wishing to transact business within the State of California must first obtain a certificate of qualification from the Secretary of State. CAL. CIV. PROC. CODE. § 2105(a). In order to obtain that certificate, the foreign corporation must file a form, signed by a corporate officer stating, inter alia, (1) “[t]he name of an agent upon whom process directed to the corporation may be served within this state” and (2) “[i]ts irrevocable consent to service of process directed to it upon the agent designated and to service of process on the Secretary of State if the agent designated or the agent’s successor is no longer authorized to act or cannot be found at the address given.” CAL. CIV. PROC. CODE. § 2105(a). “The purpose of the certificate of qualification is to facilitate service of process and to protect against state tax evasion.” The Capital Gold Grp., Inc. v. Nortier, 176 Cal. App. 4th 1119, 1132 (2009). -63:20-cv-00461-BEN-AHG 1 nine attempts to personally serve CDP at the Registered Agent Address. 2 First, Advanced Attorney Services, Inc. attempted to serve Mr. Frye five times at the 3 Registered Agent Address on March 17, 2020 at 11:52 a.m.; March 18, 2020 at 7:59 a.m.; 4 March 19, 2020 at 7:05 p.m.; March 20, 2020; and March 23, 2020. Exhibit C to 5 Declaration of Daniel P. Heilbrun, Esq. (“Heilbrun Decl.”), ECF No. 7-4 at 12. Each 6 attempt noted that no one answered the door, there were no vehicles parked in the driveway, 7 and on one of the attempts, there was a package at the property addressed to a Cora 8 Musgrave. Id. 9 Second, Robert Harenberg, Jr. attested through a Declaration of Due Diligence that 10 he made three additional separate attempts to serve CDP at the Registered Agent Address 11 on June 1, 2, and 5, 2020. Exhibit D to Heilbrun Decl., ECF No. 7-4 at 14. This declaration 12 states that the address is a residence, but the gates are locked and secured, and it is vacant 13 inside. Id. 14 Finally, Gary Buckner attested he made an additional attempt to serve Mr. Frye and 15 CDP on December 15, 2020, which included a stakeout, at the Registered Agent Address. 16 Exhibit E to Heilbrun Decl., ECF No. 7-4 at 15-16; Heilbrun Decl., ECF No. 7-1 at 2, ¶ 8. 17 This declaration states that the address is for a vacant mobile home with no furnishings 18 inside or window coverings. Exhibit E to Heilbrun Decl., ECF No. 7-4 at 15-16. Mr. 19 Buckner stated that he spoke with the nearest neighbor, who indicated that no one had lived 20 there for over six months. Id. 21 Based on these attempts, the Court finds that CDP cannot with reasonable diligence 22 be personally served at the address listed with the Arizona Secretary of State for service of 23 process. 24 B. 25 “It is elementary that substituted service upon a foreign corporation may be made 26 only in the manner and form authorized by statute.” Tri-State Mfg. Co. v. Super. Crt. for 27 Los Angeles Cty., 224 Cal. App. 2d 442, 444 (1964). Unlike with an affidavit in support 28 of service by publication, which must be submitted by the plaintiff rather than his or her CDP Cannot be Served With Reasonable Diligence in Any Other Way -73:20-cv-00461-BEN-AHG 1 attorney, an affidavit in support of service on the California Secretary of State may be 2 submitted by the plaintiff’s attorney. Henry R. Jahn & Son, Inc. v. Super. Crt. In & For 3 San Mateo Cty., 49 Cal. 2d 855, 858 (1958) (noting that “[t]he statute does not provide that 4 the affidavit [for service on the Secretary of State] cannot be made by the plaintiff’s 5 attorney”) (interpreting section 6501 of the Corporations Code). 6 requisite is an affidavit showing that the corporation sought to be served is subject to 7 California jurisdiction and that personal service of process cannot be had.” Tri-State, 224 8 Cal. App. 2d at 444. “An indispensable 9 In this case, this Court previously took judicial notice of the fact that CDP has no 10 registration with the California Secretary of State and is a foreign corporation. Order, ECF 11 No. 6 at 5:19-21, 8:19-24. The Court also now takes judicial notice of the fact that CDP’s 12 Arizona Secretary of State registration shows that its principal and designated agent for 13 service of process is Mr. Frye, and that its address for service of process is the Registered 14 Agent Address. See Mot. at 4:15-16; see also Exhibit A to Heilbrun Decl., ECF No. 7-4 at 15 2-3; Fed. R. Evid. 201(c)(1) (allowing courts to take judicial notice sua sponte); L’Garde, 16 Inc. v. Raytheon Space and Airborne Sys., 805 F. Supp. 2d 932, 937-38 (C.D. Cal. 2011) 17 (taking judicial notice of records from the California Secretary of State website). The 18 Registered Agent Address is also the address listed on the relevant purchase agreement. 19 Mot. at 4:17-19 (citing Heilbrun Decl. ¶ 2 at Exhibit A). Because CDP is a foreign 20 corporation, in order to authorize substitute service, Plaintiff must show both that (1) CDP 21 is subject to California jurisdiction and (2) personal service cannot be had made in any 22 other way. Tri-State, 224 Cal. App. 2d at 444. The Court finds Plaintiff has made both 23 showings as outlined below. 24 1. The Court Has Personal Jurisdiction Over Defendants 25 In its previous order, the Court expressed concern over “whether one contract with 26 Plaintiff suffices to establish minimum contacts with the State of California for this Court 27 to exercise personal jurisdiction over Defendants.” Order, ECF No. 6 at 26:3-14. The 28 Court asked Plaintiff to address this issue. Id. at 26:14-20. In response, Plaintiff has shown -83:20-cv-00461-BEN-AHG 1 that reasonable grounds exist to assert personal jurisdiction over Defendants. 2 The Due Process Clause of the Fourteenth Amendment limits the power of courts to 3 enter judgments against non-resident defendants who have not been served with process 4 within the boundaries of the state in which the court asserting jurisdiction sits. Pennoyer 5 v. Neff, 95 U.S. 714 (1877), overruled in part by Shaffer v. Heitner, 433 U.S. 186 (1977); 6 see also U.S. CONST. AMEND. XIV, § 1 (preventing states from depriving “any person of 7 life, liberty, or property, without due process of law”). In order to subject a non-resident 8 defendant to personal jurisdiction, he or she must have enough minimum contacts with the 9 forum state that maintenance of the suit does not offend “traditional notions of fair play 10 and substantial justice.” Int’l Shoe Co. v. State of Wash., Office of Unemployment Comp. 11 & Placement, 326 U.S. 310, 316 (1945). By requiring these individuals to have “fair 12 warning that a particular activity may subject [them] to the jurisdiction of a foreign 13 sovereign,” Shaffer, 433 U.S. at 218 (Stevens, J., concurring in judgment), the Due Process 14 Clause “gives a degree of predictability to the legal system that allows potential defendants 15 to structure their primary conduct with some minimum assurance as to where that conduct 16 will and will not render them liable to suit,” World-Wide Volkswagen Corp. v. Woodson, 17 444 U.S. 286, 297 (1980). In that vein, “[i]t is sufficient for purposes of due process that 18 the suit was based on a contract which had substantial connection with that State.” McGee 19 v. Int’l Life Ins. Co., 355 U.S. 220, 223 (1957). “The forum State [also] does not exceed 20 its powers under the Due Process Clause if it asserts personal jurisdiction over a 21 corporation that delivers its products into the stream of commerce with the expectation that 22 they will be purchased by consumers in the forum State” and those products subsequently 23 injure forum consumers. World-Wide, 444 U.S. at 297-98. 24 In order to examine whether personal jurisdiction over a defendant is appropriate, 25 courts first determine whether it is authorized and Constitutional. Sher v. Johnson, 911 26 F.2d 1357, 1361 (9th Cir. 1990). Although 28 U.S.C. § 1332(a)(1) authorizes federal courts 27 to assert “original jurisdiction of all civil actions where the matter in controversy exceeds 28 the sum or value of $75,000 . . . and is between—citizens of different States,” such as this -93:20-cv-00461-BEN-AHG 1 case, there is no federal statute expressly authorizing jurisdiction over nonresident 2 defendants who breach a contract with a California business. 3 authorizes jurisdiction, the district court applies the law of the state in which it sits. FED. 4 R. CIV. P. 4(k)(1)(A); Collegesource v. Academic One, 653 F.3d 1066 (9th Cir. 2011). 5 California’s long-arm statute permits jurisdiction coextensively with the due process 6 clause, authorizing jurisdiction wherever allowed by the state. CAL. CIV. PROC. CODE § 7 410.10; Mavrix Photo, Inc. v. Brand Tech., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). 8 Thus, courts analyze whether personal jurisdiction over a defendant comports with federal 9 due process requirements by examining whether a basis exists to assert general jurisdiction 10 or specific jurisdiction. Loomis v. Slendertone Distribution, Inc., 420 F. Supp. 3d 1046, 11 1064 (S.D. Cal. 2019) (Anello, J.). If no federal statute 12 “General jurisdiction—as applied to a corporation—arises when a foreign 13 corporation’s affiliations with the State are so continuous and systematic as to render it 14 essentially at home in the forum State.” Loomis, 420 F. Supp. 3d at 1064-65 (internal 15 quotations omitted). Courts have asserted general jurisdiction over a defendant where the 16 defendant has been served with process while voluntarily within the form, is domiciled 17 within the forum, or consents to the Court’s jurisdiction. J. McIntyre Mach., Ltd. v. 18 Nicastro, 564 U.S. 873, 880-82 (2011) (Kennedy, J., plurality); Pennoyer v. Neff, 95 U.S. 19 714, 722 (1877). However, the Ninth Circuit has held that a corporation is not subject to 20 general jurisdiction in California where, inter alia, it (1) has its principal place of business 21 outside the forum state; (2) has no office, staff, or physical presence in the forum state; (3) 22 was not licensed within the forum state; (4) indirectly made purchases of items imported 23 by California entities; or (4) had a California choice-of-law provision in some of its sales 24 contracts. Loomis, 420 F. Supp. 3d at 1065 (holding that “[g]iven the facts that Defendant 25 is neither incorporated in nor has its principal place of business in California, Plaintiff has 26 not provided the Court with sufficient evidence to meet the exacting standard of being 27 ‘essentially at home’ in California”). Thus, the traditional bases for general jurisdiction 28 (e.g., the place of incorporation or principal place of business for a corporation) appear to -103:20-cv-00461-BEN-AHG 1 be outside the forum state, and given CDP was not registered with the California Secretary 2 of State, general jurisdiction appears to be improper. 3 “Where general jurisdiction is inappropriate, a court may still exercise specific 4 jurisdiction if the defendant has sufficient contacts with the forum state in relation to the 5 cause[s] of action.” Sher, 911 F.2d at 1361 (citing Data Disc, Inc. v. Sys. Tech. Assocs., 6 Inc., 557 F.2d 1280, 1286 (9th Cir. 1977)). The relevant test for applying personal 7 jurisdiction in the instant case will be the Ninth Circuit’s three-pronged test for determining 8 whether a defendant meets the Supreme Court’s minimum contacts test for asserting 9 specific jurisdiction. Glob. Commodities Trading Grp., Inc. v. Beneficio de Arroz 10 Choloma, S.A., 972 F.3d 1101, 1107 (9th Cir. 2020). This test examines whether the (1) 11 defendant has purposefully (a) directed his activities towards the forum state or initiated a 12 transaction with the forum state or one of its residents or (b) availed himself of the 13 privileges and benefits of the forum state permitting him to benefit from the protections of 14 its laws; (2) cause of action arises out of the defendant’s activities related to the forum 15 state; and (3) assertion of jurisdiction is reasonable and comports with “fair play and 16 substantial justice.” See id. 17 In this case, Plaintiff argues that the CDP has sufficient minimum contacts with 18 California to allow the Court to assert personal jurisdiction over CDP and Mr. Frye. Mot. 19 at 6:20-23. A member of Plaintiff’s company, Vincent Espinoza, submitted a declaration 20 in support of Plaintiff’s Motion, attesting to the fact that (1) Mr. Frye said that he regularly 21 did business in California; (2) he met with Mr. Frye in person in Campo, California to 22 negotiate the terms of the sale of the goods; (3) Mr. Frye represented to Mr. Espinoza that 23 he had an employee in Riverside, California and the goods to be sold were stored in Santa 24 Maria, California; and (4) Mr. Frye refuses to provide Mr. Espinoza with an address at 25 which he may be served. Declaration of Vincent Espinoza, ECF No. 7-3 (“Espinoza 26 Decl.”) at 1-2, ¶ 3-7. As such, Plaintiff contends the Court may assert jurisdiction over 27 Defendants because (1) Defendants’ actions harmed Plaintiff, a California business, and 28 the effects of that harm are felt in California; (2) Mr. Frye traveled to California in 2019 to -113:20-cv-00461-BEN-AHG 1 meet with Mr. Espinoza in person to negotiate the terms of the contract allegedly breached; 2 (3) the goods at issue were stored in California; (4) Mr. Frye told Plaintiff he had an 3 employee in Riverside, California; (5) the agreement called for the goods to be delivered 4 in California; (6) Defendants represented to Plaintiff that they regularly engage in business 5 in California; and (7) Mr. Frye is currently contracting to do a job for Plaintiff in 6 Sacramento, California. Mot. at 7:22-8:19, 9:1-15 (citing Espinoza Decl. at ¶¶ 2-7). 7 Plaintiff argues that these facts demonstrate that (1) Defendants have purposeful 8 directed their activities towards the forum state, including by initiating a transaction with 9 a resident of the forum state; (2) the cause of action arises of Defendants’ activities in 10 California; and (3) assertion of jurisdiction comports with fair play and substantial justice. 11 The agreement attached to the complaint confirms that if the contract is binding, the goods 12 were to be transferred in Santa Maria, California. See, e.g., Compl., ECF No. 1-3 at 3, § 4 13 (“On the Closing date the inventory, equipment, and fixtures to be transferred will be 14 located at Santa Maria, California, and will not be removed without the written consent of 15 the Buyer.”); see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 487 (1985) (holding 16 that because the defendant “established a substantial and continuing relationship with 17 Burger King’s Miami headquarters, received fair notice from the contract documents and 18 the course of dealing that he might be subject to suit in Florida, and . . . failed to demonstrate 19 how jurisdiction in that forum would otherwise be fundamentally unfair, . . . the District 20 Court’s exercise of jurisdiction . . . did not offend due process”). Further, that same 21 agreement, although not fully executed, was signed by Mr. Frye and includes a California 22 choice of law clause. See Compl., ECF No. 1-3 at 6, § 15(a). “In assessing personal 23 jurisdiction, the plaintiff ‘need only demonstrate facts that if true would support jurisdiction 24 over the defendant.’” Ameron v. Anvil Indus., Inc., 524 F.2d 1144, 1145 (9th Cir. 1975) 25 (quoting Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995)). The Court finds Plaintiff 26 has demonstrated sufficient facts that if true would support jurisdiction over Defendants. 27 28 2. Defendants Cannot be Served with Process by Other Means Plaintiff has shown that efforts to serve Defendants by mail, at alternate addresses, -123:20-cv-00461-BEN-AHG 1 and by service upon Defendants’ attorney have proven unsuccessful. a. 2 Service by Mail 3 Section 415.40 of the CCP, entitled “Service on Person Outside State,” addresses 4 serving parties outside California and provides that “[a] summons may be served on a 5 person outside this state in any manner provided by this article or by sending a copy of the 6 summons and of the complaint to the person to be served by first-class mail, postage 7 prepaid, requiring a return receipt.” CAL. CIV. PROC. CODE § 415.40. However, section 8 417.20 of the CCP, falling under Article 5, covering “Proof of Service,” requires that where 9 a summons is served by mail on a person outside of California pursuant to section 415.40, 10 a plaintiff must provide proof of service in the form of “evidence satisfactory to the court 11 establishing actual delivery to the person to be served, by a signed return receipt or other 12 evidence.” CAL. CIV. PROC. CODE § 417.20; see also Stamps v. Super. Crt., 14 Cal. App. 13 3d 108, 110 (1971) (holding that “[t]he trial court deemed erroneously that the service 14 described was adequate to comply with the law” where service of process “was sent by 15 airmail, return receipt requested, but the return receipt was returned bearing the notice 16 ‘unclaimed,’” and as a result, “there was no ‘signed receipt or other evidence’ of delivery”). 17 In this case, Mr. Heilbrun stated that he “searched the Arizona Secretary of State 18 business search portal” and located the relevant filing for CDP, which showed that Mr. 19 Frye was the registered agent for service of process, and the address for service was the 20 Registered Agent Address. Heilbrun Decl., ECF No. 7-1 at 1, ¶ 2. He also stated that he 21 verified the Registered Agent Address “via a commercially available company locator and 22 background check platform maintained by LexisNexus [sic].” Mot. at 4:19-21 (citing 23 Exhibit B). 24 Plaintiff has also attempted service by Notice of Acknowledgment and Receipt, 25 pursuant to CCP section 415.30(a); however, the “[m]ail was returned as ‘undeliverable.’” 26 Mot. at 5:6:10-12 (citing Heilbrun Decl. ¶ 4). Service by mail, pursuant to CCP section 27 415.50 was also attempted by sending the summons and complaint by certified mail, 28 returned receipt requested on March 30, 2020 to the Registered Agent Address, but the -133:20-cv-00461-BEN-AHG 1 mail was also returned as undeliverable. Mot. at 6:9-12 (citing Heilbrun Decl. ¶ 5); see 2 also Exhibit K to Heilbrun Decl., ECF No. 7-4 at 72-76 (showing a proof of Service on 3 CDP and attaching certified mail receipts to Mr. Frye and CDP at the Registered Agent 4 Address). Thus, Plaintiff attempted service by both Notice and Acknowledgement of Receipt 5 6 and certified mail, neither of which resulted in successful service. b. 7 Service at Alternate Addresses 8 On December 18, 2020, Mr. Buckner attempted to serve Defendants at another 9 address, 454 N. Pinal Parkway, Florence, AZ 85132,4 and performed a stakeout at that 10 address, but the address was a vacant lot with no structured buildings nearby. Exhibit E to 11 Heilbrun Decl., ECF No. 7-4 at 15-16; see also Heilbrun Decl., ECF No. 7-1 at 2, ¶ 9. 12 “Plaintiff and Plaintiff’s counsel searched several commercially available and free 13 databases for both CDP and Chris Frye in order to find any additional address for either, 14 [but] these searches provided no additional information.” Mot. at 5:7-10 (citing Nannicola 15 Decl. ¶ 6; Heilbrun Decl. ¶ 2). Thus, Plaintiff made a reasonably diligent effort to locate 16 and attempt service of process at alternate addresses. c. 17 Service on Defendants’ Attorney 18 Mr. Heilbrun also states that he asked Defendants’ counsel, Karen A. O’Neil (“Ms. 19 O’Neil”) if she would accept service of process on behalf of her clients, but she informed 20 him that even though she represented Defendants, she was not authorized to accept service 21 of process on their behalf. Mot. at 6:15-18 (citing Heilbrun Decl., ECF No. 7-1 at 2, ¶ 6 at 22 Exhibit F). However, she requested a copy of the summons and complaint, which Mr. 23 Heilbrun provided. Id. She also asked that Plaintiff refrain from attempting the default of 24 25 26 27 28 Armand Nannicola, another member of Plaintiff’s company, stated that he obtained a business card with CDP’s address at 454 N. Pinal Parkway, Florence, AZ 85132. Declaration of Armand Nannicola, ECF No. 7-2 at 1, ¶ 6; see also Mot. at 5:6-7. Also, “Advanced Attorney Service, a registered process server hired by Plaintiff, performed a search of their own databases and discovered” that same address from CDP’s business cards as also being associated with CDP. Mot. at 5:1-7 (citing Heilbrun Decl. ¶ 7). 4 -143:20-cv-00461-BEN-AHG 1 Mr. Frye despite refusing to respond to the at least four requests by Plaintiff’s counsel to 2 have her accept service of process on Mr. Frye’s behalf. Exhibit G to Heilbrun Decl., ECF 3 No. 7-4 at 22, 24, 28, 35. 4 In sum, Section 416.10 of the CCP, governing service of process on corporations 5 allows service of process on four categories of individuals: (1) the designated agent 6 for service of process; (2) “the president, chief executive officer, or . . . person authorized 7 by the corporation to receive service of process,” (3) a cashier if the corporation is a bank, 8 or (4) “[i]f authorized by any provision in . . . the Corporations Code,” the Secretary of 9 State. CAL. CODE CIV. PROC. § 416.10. Plaintiff has shown an inability to serve the 10 individuals designated under the first two categories (i.e., a designated agent for service of 11 process or appropriate corporate officer). See id. Further, because CDP is not a bank, the 12 third category of individuals is inapplicable. As a result, Plaintiff may serve the summons 13 and complaint on CDP by delivering it to the Secretary of State if authorized by one of the 14 listed provisions of the Corporations Code. 15 In this case, the only provisions applicable to CDP, as a foreign corporation, are 16 sections 2110 and 2111 of the Corporations Code. Section 2111 of the Corporations Code 17 provides for service of process upon the Secretary of State: If the agent designated for the service of process is a natural person and cannot be found with due diligence at the address stated in the designation . . . and if no one of the officers or agents of the corporation specified in Section 2110 can be found after diligent search and it is so shown by affidavit to the satisfaction of the court, then the court may make an order that service be made by personal delivery to the Secretary of State . . . 18 19 20 21 22 23 24 25 26 27 28 CAL. CORP. CODE § 2111; see also ARIZ. R. CIV. P. 4.1(j)(1) (providing that “[i]f a domestic corporation does not have an officer or an agent within Arizona on whom process can be served, the corporation may be served by depositing two copies of the summons and the pleading being served with the Arizona Corporation Commission”). Additionally, the California Code of Civil Procedure also allows for service of process on a defendant outside the State of California “as prescribed by the law of the place where the -153:20-cv-00461-BEN-AHG 1 person is served.” CAL. CIV. PROC. CODE § 413.10(b). Under the Arizona Rules of Civil 2 Procedure, “[i]f a domestic corporation does not have an officer or an agent within Arizona 3 on whom process can be served, the corporation may be served by depositing two copies 4 of the summons and the pleading being served with the Arizona Corporation Commission.” 5 ARIZ. R. CIV. P. 4.1(j)(1). 6 Although the Court finds that service on the California Secretary of State may be 7 appropriate in this case, especially given Defendants have actual notice of this lawsuit, it 8 also determines that given CDP never registered to do business in California, service on 9 the Arizona Corporation Commission most comports with traditional notions of fair play 10 and substantial justice. 11 C. Doe Defendants 12 As a final matter, Plaintiff has named Does 1 through 10 in this lawsuit. Unlike 13 California code pleading, the Federal Rules of Civil Procedure (“FRCP”) neither authorize 14 nor prohibit the use of fictitious parties; however, FRCP 10 does require a plaintiff to 15 include the names of all parties in his complaint. See Keavney v. Cty. of San Diego, No. 16 319CV01947AJBBGS, 2020 WL 4192286, at *4-5 (S.D. Cal. July 21, 2020) (Battaglia, J.) 17 (citing FED. R. CIV. P. 10(a)). Further, naming doe defendants implicates Rule 4 requiring 18 service of the complaint. Id. (noting that “it is effectively impossible for the United States 19 Marshal or deputy marshal to fulfill his or her duty to serve an unnamed 20 defendant”); Finefeuiaki v. Maui Cmty. Corr. Ctr. Staff & Affiliates, 2018 WL 3580764, at 21 *6 (D. Haw. July 25, 2018) (same). “A plaintiff may refer to unknown defendants as 22 Defendant John Doe 1, John Doe 2, John Doe 3, and so on, but he must allege specific facts 23 showing how each particular doe defendant violated his rights.” Keavney, 2020 WL 24 4192286 at *4-5. Where a plaintiff fails to link the alleged wrong or explain how any of 25 the unidentified parties he sued personally caused a violation of his rights, the court must 26 dismiss those individuals, especially when they have not been served. See, e.g., FED. R. 27 CIV. P. 4(m) (providing that “[i]f a defendant is not served within 90 days after the 28 complaint is filed, the court—on motion or on its own after notice to the plaintiff—must -163:20-cv-00461-BEN-AHG 1 dismiss the action without prejudice against that defendant or order that service be made 2 within a specified time.”); see also S.D. Cal. Civ. R. 41.1(a); Keavney, 2020 WL 4192286 3 at *4-5 (dismissing the plaintiff’s first amended complaint). 4 Even if the FRCP permitted doe defendant pleading, Plaintiff would still need to 5 seek leave of court in order to substitute in the true names of those defendants. As such, 6 the Court dismisses the doe defendants. Plaintiff may seek leave of court to file an 7 amended complaint if and when that is necessary. 8 V. CONCLUSION 9 For the above reasons, the Court GRANTS Plaintiff’s Motion. Plaintiff may affect 10 service or process on Defendant CDP by serving two copies of the summons and complaint 11 on the Arizona Corporation Commission. All doe defendants are dismissed from this case 12 without prejudice. 13 14 IT IS SO ORDERED. DATED: March 25, 2021 HON. ROGER T. BENITEZ United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -17- 3:20-cv-00461-BEN-AHG
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